Elsa Chavez v. Jpmorgan Chase Bank
888 F.3d 413
| 9th Cir. | 2018Background
- Chavez, a California citizen, sued JPMorgan Chase (JPMC) in state court for FEHA, CFRA, Labor Code §226, and wrongful termination, seeking lost earnings (past and future), medical expenses, attorneys’ fees, punitive damages, and injunctive relief.
- JPMC removed the action to federal court based on diversity jurisdiction under 28 U.S.C. § 1332; Chavez did not contest removal and the parties’ initial filings acknowledged federal jurisdiction.
- The district court granted summary judgment for JPMC on all claims; Chavez appealed and for the first time challenged subject matter jurisdiction, arguing the amount in controversy did not exceed $75,000.
- At removal Chavez had admitted her salary exceeded $39,000 and that she intended to work about nine more years; California law permits recovery of future lost earnings under FEHA.
- JPMC argued the amount in controversy exceeded $75,000 by including both past and future lost wages (and other damages/fees); Chavez contended only wages accrued before removal should count.
- The Ninth Circuit evaluated whether the amount in controversy is determined by the complaint operative at the time of removal and whether future damages claimed at removal are included.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What temporal scope applies when assessing amount in controversy at time of removal? | Chavez: Only damages incurred before removal count (e.g., lost wages only up to removal). | JPMC: Amount in controversy is determined by the complaint at removal and includes all relief claimed (including future damages). | The amount in controversy is determined by the complaint operative at removal and includes all relief claimed at that time, including future damages to which plaintiff would be entitled if victorious. |
| Whether JPMC met its burden to show amount in controversy exceeded $75,000 | Chavez: Admissions and facts show wages through removal would be below $75,000, so JPMC failed to meet burden. | JPMC: Chavez’s concession and deposition showing salary and projected years of work establish lost future wages exceeding $75,000. | JPMC met its burden by preponderance of evidence (plaintiff’s concession and deposition admissions show lost future wages exceed $75,000). |
| Effect of plaintiff’s earlier concession of jurisdiction | Chavez: Concession below is not binding if amount in controversy was insufficient. | JPMC: Concession is strong evidence of plaintiff’s good-faith belief that claims exceed jurisdictional amount. | Plaintiff’s prior concession is strong evidence and treated like an allegation of damages exceeding the threshold when made in good faith. |
| Whether subsequent events after removal that reduce damages defeat jurisdiction | Chavez: Not argued as central here. | JPMC: Amount at removal controls; later reductions do not oust jurisdiction. | The amount in controversy is fixed at removal; post-removal decreases do not defeat jurisdiction once threshold satisfied. |
Key Cases Cited
- Kroske v. U.S. Bank Corp., 432 F.3d 976 (9th Cir.) (amount-in-controversy assessed at time of removal)
- Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644 (9th Cir.) (what may be included in amount in controversy)
- Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118 (9th Cir.) (defendant bears burden to establish amount in controversy by preponderance)
- Corral v. Select Portfolio Servicing, Inc., 878 F.3d 770 (9th Cir.) (conclusory amount allegations insufficient)
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014) (procedural rules for removal and evaluating defendant’s Notice of Removal)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir.) (defendant must present facts, not speculation, to establish amount in controversy)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (amount in controversy determined at time of removal; later reductions do not destroy jurisdiction)
- Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373 (9th Cir.) (plaintiff’s judicial admissions can satisfy amount-in-controversy requirement)